By Cowry Asset
Last week, the Central Bank of Nigeria (CBN) sold treasury bills via primary market totalling N130.36 billion, viz: 91-day bills worth N28.69 billion (Stop Rate, SR, rose to 13.25% from 13.15%), 182-day bills worth N33.49 billion (Stop Rate (SR) fell to 15.49% from 16.80%) and 364-day bills worth N68.18 billion (Stop Rate fell to 15.73% from 17.00%).
These auctions were more than offset by matured primary and secondary market securities worth N413.77 billion.
However, NIBOR rose for most of the tenor buckets amid financial system liquidity strain – NIBOR for the Overnight funds, 1 month, 3 months and 6 months tenor buckets rose w-o-w to 26.03% (from 13.85%), 19.99% (from 18.77%), 21.46% (from 21.21%) and 22.91% (from 22.58%) respectively.
Elsewhere, NITTY fell for most of the maturities amid bargain hunting activities – yield on the 3 months, 6 months and 12 maturities fell to 17.04% (from 19.14%), 18.14% (from 18.91%) and 18.09% (from 19.30%) respectively.
However, for the 1 month maturity, NITTY rose to 18.63% (from 17.70%). This week, there will be maturing bills via Open Market Operations (OMO) totalling N14.13 billion, viz: 167-day bills worth N0.55 billion; 170-day bills worth N0.48 billion, 174-day bills worth N0.23 billion, 175-day bills worth N0.095 billion, 177-day bills worth N0.065 billion, 184-day bills worth N0.16 billion, 185-day bills worth N1.07 billion, 188-day bills worth N2.09 billion, 189-day bills worth N3.09 billion, 192-day bills worth N0.22 billion, 199-day bills worth N3.50 billion and 206-day bills worth 2.32 billion.
As a result of the limited expected inflows at the interbank market, we expect some pressure of the financial system liquidity with resultant increase in rates.
Adedapo Adesanya